Challenges Faced by Companies in Global Markets

This essay analyzes the challenges faced by companies in global markets and provides recommendations for overcoming them. It focuses on issues such as communication barriers, leadership skills, and cultural differences.

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Subject Name: Managing in the Global Context T1 2019
Lecturer/Tutor: ESTHER CHADEROPA
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Word Count: 3000
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I Am aware of ICMS Policy on plagiarism as stated in the ICMS Student Handbook. This Assignment
does not breach those requirements nor has it been previously submitted for assessment contributing to
any other subject or course. The Ideas and information that are not mine have been referenced
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Introduction
The companies nowadays operate in the societies rich in diverse cultural phenomena.
This is because no company is limited to its domestic or local purview and desires for a huge
extension (Evertson & Weinstein, 2015). In order to expand the companies either reach out to the
foreign customers where it has to generate new leads in the market or to find out the
heterogeneous group of customers in the local market. Anywhere they go they need to analyze
the customers and the geographical setting and find out the supportive areas for the defined
products and services. Similarly, with the change in the plot of the business setting the
organizational behaviour also experience a change and therefore impacting the business scenario.
This depends on the local culture settings that companies also develop such principles as it is
also a part of the society. This essay will analyze the findings of the five reviewed articles and
the questions which has been raised. It will deal with the solutions how to overcome the
contemporary management issues arising recently in the market. These issues are coming in front
of the company managers and serves as the biggest challenge for them to keep going with their
business. It will clarify how these factors are impacting the organizational culture and gives birth
to the various emerging policies and strategies (Davies, 2016). The essay would provide
recommendations at the end with the conclusion for how to identify various characteristics of
these social cultural factors including the styles of communication and what should be the
decision making strategy for the organization. As an effective action plan the essay will critically
analyze the different leadership styles, measured thinking abilities and developing problem
solving behaviour to increase the efficiency of the organization.
Importance of the issues
The issues and challenges that companies face nowadays are mostly for the indecisive
management. The decisions from the higher authorities are valuable for organization as they help
framing strategies to run that organization in the competitive market. The company face issues
with the leadership skills, managing multiple tasks single handedly, effective strategy
formulation, implementing dormant skills, ignorance of technological advancement, denials for
learning new concepts, starting up with green field projects and any other changes in the working
conditions (Bunting, 2016). These challenges affects the growth and development of an
organization. Several times it has been witnessed that, due to the wrong recruitment of the

employees of dedicated departments within the organization. This can distort the existing
working conditions and the organizational culture. The opposite of this can also be the case there
can be value addition to the culture of organization with the recruitment of new employees. Due
to these many challenges the company has to bear huge losses as the company deals with heavy
turnovers (Laurie, (2016). The companies think globally today to embrace other areas for its
business space and in order to do that it has been seen in few case studies that companies have
went completely insolvent, while aspiring to expand in other geographical regions. The
expansion is the new business trend as the local resources falls short in front of the income
perspectives (Whelan, 2016). The entrepreneurs can visualize clearly the gap between them and
the undiscovered market. In the following five reviews there is one thing very common which is
the basic criteria of these issues. The communication barrier forms a gap between the sender and
the receivers which stand outs to be one of the most negative of all. This gives rise to much of
the challenges prevalent in organizations today. Just in the case of the MNC like DANONE it
faced the challenge of approach to the local market, get acquainted with local market phenomena
and dynamics. It suffers due to the proper communication channel. It is to be remembered that
while we are approaching being new from our end we need to consider even the minute facts to
increase the familiarity level to set up a business DANONE needs to have the clear
communication process (Bakotić, 2016). In utter absence of this, the company has to sell out its
local outlet to one of the local dealer named Parag foods. This is the often case in many of the
companies and can only be avoid if the communication kept is intact between two parties. The
importance of the issue faced by the KFC is that when it came to enter the local market of India
it found few cultural issues and religions affecting their business. People in India identify KFC as
one of the food hubs serving non vegetarian items. This same idea of KFC for getting success in
other areas were all accepted. But now when they enter the Indian market working on same
principles seems difficult for the company (Goldman, Nienaber & Pretorius, 2015). As a result it
has to plan for a change in its service e offerings. It has to start with the vegetarian options
keeping in mind the demands of the Indian customers. Markets today have changed a lot. The
scenario seems much competitive than ever as buyers have enormous list of options in front of
them. The smart business men or the marketers try to get the best option early to their hands
before its competitors to grab the maximum size of the market. Next issue was faced by the coca
cola company to finalize deals with the external stakeholders (Davies, 2016). It is quite

surprising for the critics that despite being the most known beverages worldwide it still have
troubles to meet the needs and maintain the supply chain flow for the product. It has issues in the
taxation systems and barely makes profit to pay hefty amount charged as tax and therefore
sometimes it also has to manipulate the assets to pay the tax. This is the most drastic condition a
company can face and this is an important issue for the company. It the high time to think for the
company about implementing several ways of promotional tools and offering deals to the
customers to make the company more visible. This issue if not noticed soon can go the other way
round because market is full of uncertainty regarding the competitors. The innovative new ideas
have the potentiality to beat old companies with their modern competencies (Coccia, 2015). The
kind of similar issue was faced by the Tata Starbucks in India and ways they have overcome it
through giving away discounts to the customers. Then finally it could not survive alone and
merged up with TATA Global Beverages in India (Goldman, Nienaber & Pretorius, 2015).
Literature review
The background of these issues have the aspects of management related problems.
Somewhere the management in things are lacking and that is why the work is not getting done
the way it has been planned off (Burrell & Morgan, 2017). The Indian market seems to be the
most impulsive state of market area where the marketers need to first sell their ideas and post
which the product selling does no requires any separate efforts. The findings in the articles of the
annotated bibliography are all facing some or the other challenges of business setting in the
Indian markets. India is a place which calls for marketing and selling products and services. The
market scenario is moderate to reach by the competitive entrants and therefore companies that
tends to have potentials to grow are able to establish their business. But the political conditions
are bit disturbing in this country for which entering and setting up of business sometimes require
a huge effort (Van Aken & Berends, 2018). The marketing strategies should be strong enough to
create an effect on the Indian customers. The customers are already exposed to many options and
barely have time to get confused for the products they want. The organisations face most of the
challenges of diverse cultures wherever they go to open up a new market. It takes time for the
company to adapt itself with the given condition of the culture over there. The recruitment also
becomes a major issue for the company as the local people cannot find the right match to their
culture with that of the organization. Communication out of that forms the integral barrier
between the organization and the local community (Jones, Wicks & Freeman, 2017). This factor

needs to be strong as both the upward and downward communication is required to maintain
functionality of an organization. Communication creates a common platform for the people to
understand each other and develops interpersonal relationships in the organization. This is what a
company needs because any organization can run based on the proper understanding and
amalgamation of thoughts, ideas and opinions. The articles of the assessment 1 has witnessed
with some or the other problems faced by the organizations mentioned there. The MNCs are
facing difficulties in setting up their respective businesses due to some organizational
disturbances and sue to lack of few skills. The leadership skills are very important when one is
approaching one’s business ideas to others. going out from the own domestic market place and
make a successful approach for the product like DANONE food products requires the
appropriate leadership and public speaking skills (Yawar & Seuring, 2017). The learning of these
skills and abilities are a part of the organizational strategies and to be included among every
employee if that organization. The review of these challenges are worthwhile as these are some
of the contemporary management issues being identified in most of the firms. Out of those five
articles, the Minakshi’s Wringley is competent enough than others to plan a different kind of
setup in the Indian market. Among the rest few have collapsed, few went of merging with other
subsidiary brands (Goldman, Nienaber & Pretorius, 2015). These happened because individually
they cannot make themselves distinct in the market and preferred either to sell out the business or
to tie up or some has chosen to bounce back with all the efforts.
Analysis
When analyzed the summary of the reviewed articles it has been seen that the company
lack in some of the skills for which they are facing over the challenges and cannot meet the
requirement. The market and its customers have become too much demand oriented (Kopnina &
Blewitt, 2018). The products may be very useful and robust or the service could be very useful or
intense people would avail only that portion which they would like to have. These kind of
markets are developing nowadays proving to be the greatest challenges for the marketers or the
organizations. In order to survive in the market the organizations have to be competent from all
the aspects (Higgs & Dulewicz, 2016). First of all the organizations should improve their internal
functionalities, training of the employees, nurturing problem solving behaviour among the
employees and create opportunities for motivating the employees. This will definitely increase

the productivity of the organization and the employees’ interest towards the work. The
employees should be trained on few marketing aspects such as the networking between self and
the other companies and external stakeholders. Due to the Lack of approach and proper channels
of networking communications DANONE has to sell out its outlet from Haryana (Yawar &
Seuring, 2017). This is the most important challenge companies are facing. They may get world
class talents but actually do not have enough motivation resources to retain them. The
organizations that work for the employee motivation would surely retain the best talents from the
working environment. Employees these days seek learning or f the work and expects growth
opportunities in the particular organization they work. The talents are becoming over rated
because they are educated but are not placed to likable companies. If these situations are there
then of course the companies will face challenges at every steps. The external factors are
however not in the control of the organization but it can take forecasted measures to meet those
challenges (Macdonald, Burke & Stewart, 2017).
The analysis on the issues has many critical aspects into it as the companies claim
themselves the multinational companies but do not strategize basics of the market dynamics. The
companies could have taken beforehand measures for the market research that would make their
task easier. The multinational company KFC has adapted to the demand roles of the Indian
customers when they started selling veg burgers and other vegetarian delicacies apart from the
beef and other non-vegetarian items (Coccia, 2015). The companies were not really prepared to
be set up otherwise they could have faced the usual management challenges but the situation
would not arrive to be a shut down to the business. This puts a negative impact for the
company’s brand value in the customers’ mind. Any service or product industry must value the
customer satisfaction levels and also their feedback is important for the business to prosper in the
future. The companies were not strong in terms of the organizational values (Graesser et al.,
2018). The impact was less than the impact of the Indian market scenario. The companies were
not so competent enough to beat the existing India brands. The companies did not implied the
proper problem solving attitude as the challenges have come and they could not conquer them to
move ahead. The companies have shown a profile of failures in the field of planning for the
marketing and human resource strategies. These companies have had no plans before otherwise
Indian market has the huge potential of developing any business. The Indian market has both the
opportunities of brown field and green field projects which made it quit flexible for the foreign

companies to come and settle down their businesses (Goldman, Nienaber & Pretorius, 2015). But
now the scenario has been little changed as the country is started the new venture of Make in
India, initiative through which the foreign goods and services related companies would be having
entry barriers and would be asked for high excise duties and tariffs to do their business set up in
India. Still there are foreign companies that continues business in this market. The reason is that,
companies know how to create the product and service demands among the customers (Singh et
al., 2018). It creates a situation where people want to get a thing before they are in need of it. The
companies have efficient marketing teams who pitches the marketing plans and strategies of
penetrating those products and services to the customers. The marketers are diligent enough to
create the demands among consumers and plans such activities that would pull the customers to
get it from the producers. The companies are expert in strategizing, as in, they keep the track of
the customers’ forward footsteps that what is going to be the next demand in the market and just
before that the company launches something alike to the customers’ demand and stream videos
of their products and services online (Kumar & Sethi, 2016). This strategy is mostly used by the
foreign companies who knows the fact that they are not meeting their customer base to explain
their product or service features. So they prefer providing descriptions of that product and
service in details so that customers at a glance would know whether their offerings are meeting
their demand expectations. This strategy is mostly used and preferred by the customers as well
because it provides option to choose, decide among the alternatives and purchase it online (Higgs
& Dulewicz, 2016). There are also provisions for providing feedback to know the post purchase
decisions. The multinational companies that the essay describes about can approach customers
online and pitch their products. This way their product offerings would be popular among the
customers and purchase behaviour, target audience and other factors will e clear for the marketer
to physically come and set up the concrete stores.
Concluding recommendations
To meet these issues the company should have a powerful organizational and business
strategies. Training of employees forms the integral part of any organization because the
manpower is the asset of any company. There should be a goal and objective so that the company
must get the reason to fight for. The essay has explained the issues, its importance, presented a
detailed literature review regarding the issues of various MNCs setting up their business in India.

The companies are engrossed with the challenges and face many issues to enter to the Indian
market. Based on the research and discussion in this essay there is a list of recommendations
presented below to frame the upcoming action plan.
 The companies should identify the core competency for each of their departments.
 The companies can replace their old strategies with the new ones that would match with
the current market scenario (Burrell & Morgan, 2017).
 The company can improve on its leadership skills (Jones, Wicks & Freeman, 2017).
 The company before implementing its own strategies should also research about its
competitors.
 The market knowledge is very helpful to expand or start a new business.
 The company can have strong marketing team where the planning should be made how to
sketch the targeted areas and customers after the segmentation theory (Davies, 2016).
 The company can make proactive measures such as the problem solving attitude and a
strong market research document where there should be a track of all research and
findings of the geographical areas.
 The company should have the measures for adapting the cultural diversities which forms
the major challenges (Higgs & Dulewicz, 2016).
 The company can have its own interpreters that makes the communication less a problem.
 The company should have its defined mission and vision statements that would motivate
the workers towards the assigned work or project (Kara & Fırat, 2018).
 The company can have flexible rules and regulations that would not be problem while
merging with other locality people (Bourne, 2016).
 The company can have the open ended system where there are no hidden agendas
between the managers of one business level to the other (Whelan, 2016).

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